HBOS to enter £300 million Erinaceous contest

A bidding war is expected to break out for property services company Erinaceous, as HBOS is reported to be the fourth group interested in making an offer. It may be joined by property entrepreneur Tom Hunter’s investment vehicle.

The bidding for UK-listed Erinaceous will be hard fought, as Scottish bank HBOS is reportedly interested in joining the contest for the property services company, with a market capitalisation of just under £300 million (€443 million, $595 million) according to the UK newspaper Financial Times.

3i, Europe’s largest quoted private equity manager, and mid-market rival Bridgepoint are both in the running for the company. It was revealed early last week that fellow property entrepreneur Vincent Tchenguiz was also considering a bid for the company.

A source familiar with the situation said: “3i is ahead of the other bidders. Bridgepoint is a couple of weeks behind the curve, while Tchenguiz has appointed KBC Peel Hunt to advise him on the deal.” The source was unable to confirm the HBOS bid.

3i has completed its preliminary due diligence, while Bridgepoint is still looking at the company’s books, according to the FT.

HBOS’ involvement may mean that property entrepreneur Tom Hunter’s investment vehicle West Coast Capital joins the bidding for Erinaceous, although this is unconfirmed.

Hunter teamed up with HBOS before on the £1.1 billion acquisition of McCarthy & Stone last year, beating a Permira-led consortium to acquire the retirement home-builder. West Coast Capital could not be immediately reached for comment.    

The housing sector has been the subject of numerous acquisitions recently, with both PAI Partners acquiring Kaufman et Broad for €1.3 billion ($1.8 billion) and BC Partners buying Foxtons for £400 million earlier this week.

Erinaceous’ shares were up 3.41 percent at 273 pence at 1049 GMT.